Amazon entered the Indian market in 2012 by acquiring Junglee.com. In 2013, it launched Amazon.in. It used innovative strategies like a traveling "Chai Cart" to educate sellers across 31 cities. Currently, Amazon relies on third-party logistics in India which increases costs. However, it plans to open more warehouses and potentially develop its own logistics service to reduce transportation expenses and deliver products faster. This would help Amazon compete more effectively with Flipkart in India.
Amazon's strategy for logistics and transportation in India
1. G R O U P N O. 9
F R O M R O L L N O - 5 7 TO 6 3
2. AN OVERVIEW
Tagline Globallyas - . “From A
to Z” (get any product online
from A to Z)
In India - “ #Aur Dikhao”
Jeffrey Preston Bezos, a well known
retail entrepreneur, investor, and
philanthropist , chairman and chief
executive officer of “Amazon”.
Launched in 1995 as a website that
sold only books. Which still today
remain loyal to its roots (by selling all
genre books to its loyal reader’s).
Being a voracious reader himself, he
wanted to name his company with a
magical flair as ‘Cadabra’ (from the
word Abracadabra). But finally he
ended up with the name Amazon.
3. INTRODUCTION
An American multinational
company.
Incorporated in 1994 by Jeff
Bezos.
In July 1995, sold its first book on
Amazon.com
In 1998, Acquired Junglee.com
In 2012, Entered Indian E-
Commerce space as junglee.com
In 2013, Launched Amazon.in
4. AMAZON – ENTRY TO
INDIAN MARKET
Amazon designed an eye catching
‘Chai Cart’, which could easily move
through the narrow streets of Indian
markets informing Sellers about the
benefits of starting an online business
and helping them understand the
entire process over a cup of Chai.
In a period of 4 months, the team
travelled 15,280 km across 31 cities,
served 37,200 cups of tea and
engaged with over 10,000 sellers.
Since its launch in June 2013, they
have reached sellers in 25 cities.
9. AMAZON FINANCIAL ANALYSIS
Amazon announced their revenue for the 4th quarter of 2017 and
with that, we found their overall revenue of 2017. AWS arm
proved to be the most profitable segment racking in more than $4
billion operating income alone leading to record-breaking sales in
2017.
Amazon operations, from the revenue perspective, can be divided
into three major segments: North America, International, and AWS.
11. PROBLEM STATEMENT
– LOGISTICS & TRANSPORTATION
Amazon has largest warehouses across the globe and India.
Over the past four years Amazon has been quietly building its
warehousing and logistics business in India — the brick and mortar
foundation behind Amazon’s virtual mall where millions of buyers shop
for almost everything from jewellery to clothes to phones to washing
machines and grocery.
Amazon uses third-party logistics firms including “GATI, Blue Dart and
FedEx Corp” as they does not have their own logistics services
whereas Flipkart has their own logistics services called “E-Kart”.
12. Amazon mostly uses air shipment for delivering products across India.
Whereas in order to reduce air shipments, Flipkart is setting up
regional warehouses and signing up more suppliers across the
country to ensure customers get orders delivered by the nearest
supplier.
This results in increase of transportation costs which ultimately
increases the price of product.
PROBLEM STATEMENT
– LOGISTICS & TRANSPORTATION
16. Looking at the current business scenario Amazon is growing at a
very fast pace and will be needing more warehouses to store
products.
Instead of purchasing more warehouses and increasing their fixed
cost they can rent a warehouse or use any public warehouses
available thereby saving up on a maintenance cost of a warehouse.
They can also focus on ‘Just In Time’ (JIT) approach thereby
minimizing the inventory levels and saving up on the cost of
purchasing or renting a new warehouse.
SOLUTION TO THE PROBLEM
17. Like Flipkart, Amazon can also start its own logistics services for
delivering its products to consumers as this will help them to reduce
their transportation costs.
Having own logistics service will not only help them to reduce the
transportation cost but will also help them fast delivery of products to
consumers.
Instead of frequently using air transport they can make more use of Rail
networks in order to save on cost and avoid damages occurring due to
extensive product handling in air shipment.
Reduction of costs will lead Amazon to be more competitive in market
and can use the saved funds in other business activities or business
expansion.
SOLUTION TO THE PROBLEM
18. ANALYSIS OF QUANTITATIVE
STRATEGIC PLANNING
Logistic management:
About 60% of online sales come from tier two cities. To reach the
customers quickly company needs to have an effective logistic
management. Flipkart seems to be Amazon’s only real competition.
Flipkart’s quick delivery system has led to large Flipkart loyalists.
Diversification:
Diversifying into other products will help the company to check the entry
of competitors which e.g. going into food, clothes etc. so that expenses
are also distributed and adverse conditions in one sector can be borne
by other one.
19. Innovation:
Only pricing cannot be taken as a differentiating factor, innovation is
also needed. The company should create a total buying experience
that has been missing in the Indian context. Promotion should be
done through Push and Pull strategies which will include offers and
advertising.
ANALYSIS OF QUANTITATIVE
STRATEGIC PLANNING